The rollout of legal sports betting in Massachusetts continues to suffer from twists and turns. The latest drama? Whether BetFanatics will be able to secure a Massachusetts sports betting license.
This hemming and hawing over BetFanatics' application have caught many by surprise. All major operators were considered shoo-ins to join the growing, albeit still limited, list of legal sportsbooks in Massachusetts. And BetFanatics certainly falls under that umbrella.
Or so it seemed.
For those who might not be familiar with the company, BetFanatics is a division of Fanatics, Inc., an American online manufacturer and retailer of licensed sportswear, sports collectibles, NFTs, trading cards, sports merchandise, and, now, sports betting services. Ever since legal sports betting in the United States has become a growing trend, BetFanatics has gradually made a name for itself as one of the major players in the business. Their reach and customer base are believed to be in the millions for certain states. This includes Massachusetts, where BetFanatics says it has 2 million registered customers within its retail database.
That number alone has many Massachusetts officials seeing dollar signs. But not everyone inside the Massachusetts Gaming Commission agrees. Many are outright worried that BetFanatics' reach creates both an ethical and legal dilemma.
The Reason Why BetFanatics May be Prevented from Getting a Massachusetts Sports Betting License
While BetFanatics touts its reach as a subsidiary of Fanatics, Inc., many lawmakers see it as problematic. Fanatics, Inc. is not primarily a sports betting company. They're using their retail customer database to advertise their sports betting practices.
To be sure, this isn't especially unique. Large companies cross-advertise all the time. But the sports betting industry is different. Most of the services offered by Fanatics, Inc. are not subject to laws restricting their customers' age. You don't need to be 21 years old to buy sports memorabilia. You don't even need to be 21 years old to purchase NFTs.
Theoretically, then, BetFanatics could be complicit in the promotion of underage gambling when they advertise their business to customers of Fanatics, Inc. Though there are no concrete data on the subject, there could be hundreds of thousands of people under the age of 21 who currently sit on their emailing list.
This has naturally piqued the concern of the Massachusetts Gaming Commission. As MGC's Commissioner, Eileen O'Brien, recently told Legal Sports Report: “You’ve also got these historical entries into your database, so it’s not just prospectively how are you going to handle it. But what’s the mechanism for looking retrospectively for filtering all of that.”
For their part, BetFanatics has intimated that it can filter out advertisements based on the age of its clients. The MGC, however, wants to see that feature in action. It isn't clear whether BetFanatics refuses to oblige or if the current holdup is part of the state's due diligence.
Massachusetts is Also Worried About a Previous BetFanatics Lawsuit
If BetFanatics convinces the Massachusetts Gaming Commission they won't inadvertently promote underage gambling, their application for a Massachusetts sports betting license should go through without a hitch.
Or maybe not.
The Massachusetts Gaming Commission is reportedly concerned with a previous lawsuit against BetFanatics. According to Legal Sports Report, BetFanatics' parent company (Fanatics, Inc.) had to pay $322,050 to settle a workplace race discrimination, harassment, and retaliation suit in 2019.
Moreover, this isn't the only legal hangup facing Fanatics, Inc. The MGC is also looking for clarification on a 2021 tax settlement the company reached with New York State and a 2022 antitrust case.
Thorough background checks are standard parts of the application process, and bigger companies always have legal matters in the rearview or that remain unresolved. But the Massachusetts Gaming Commission could view the sheer number of Fanatics, Inc's past troubles as a red flag.
What Does the BetFanatics Situation Mean for Other Massachusetts Sports Betting Licenses?
Regardless of what happens with BetFanatics, the Massachusetts sports betting rollout should not be materially impacted. Let's be honest: How could it? The state has yet to provide an official debut date for legal sports betting.
Even as they continue going through the application process for sports betting licenses, the Massachusetts Gaming Commission has demurred whenever pressed about when residents will be allowed to place wagers inside state lines. And with the NFL playoffs now officially underway, this has led to an increase in Massachusetts citizens scouring the internet for trustworthy and highly reviewed online sportsbooks that will allow them to set up and service an account, per multiple news outlets in the tri-state area.
A continued lack of clarity ensures the state won't offer online legal sports betting before the middle of 2023. And at this rate, given how long it's taking Massachusetts to comb through what was considered a small number of sports betting license applications, there's a good chance the rollout may not take place before 2024.
Just so we're clear: That's an estimate. Things can change on a whim. That's how the process has unfolded all along in Massachusetts. And we have no reason to believe the status quo will shift anytime soon.
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